Most importantly, take care of yourself first.No matter whose decision the separation/divorce is, it is difficult emotionally and financially. Folks in the midst of a separation are often extremely vulnerable. Some things to consider:

If you are not currently a home owner, you will need to check with an attorney to determine if your new home will be considered a marital asset.If it would be, you may need to ensure that your soon to be ex signs off on any ownership of your new property.Maryland is not a community property state, so this may be a non-issue.

If you currently own a home, things get a bit more complicated.

Do you have an executed divorce decree spelling out the dissolution of the property?If so, and you are not legally responsible for the home or the payments, the payment will not count in your debt ratio for the new purchase.

If there is a mortgage on the home and you are a co-owner, you will probably need to qualify for both mortgages, taxes, insurance and homeowner’s association fees (if any).If you and your spouse own the home together, but you can show that they have been making the payments for the mortgage out of their own account for at least 12 months, the debt may not be counted against your ratios.Please note:your name can’t be on the account, even if it is “their” money only in the account)

If there is no mortgage on the home, but your name is on title, the taxes, homeowner’s insurance, and homeowner’s association (HOA) fee will be counted in your debt ratio…UNLESS you can show documentation that someone else been making those payments for at least a year.

Be aware that in most cases a divorce decree does NOT trump a mortgage note.If the mortgage is not refinanced out of your name, and the person in the home does not make the payments, you will probably still be held responsible by the note holder.

Before you make a move, be sure to contact a real estate attorney to discuss your particular situation.It is very important to work with a lender who has experience in dealing with separation/divorce.

Although it may be difficult and you may feel that some information shouldn’t affect whether or not you qualify for a purchase, you must be up front and honest about the whole situation. Each situation is unique, having an experienced loan officer to help guide you through the process to help give you the best options for your purchase will give you additional peace of mind in a stressful time.

Comments

Bridget.......dangerous waters. Almost as murky as, "we are planning on getting married and want to buy a home together".

I know we all make our living off of closed transactions. That being said, it seems to me that there is an emotional rush to judgement in these situations.

People that should not purchase:

those in the middle of a seperation/divorce. The purchase of a home is a major decision. It should be approached when one is in a solid emotional state. There is nothing wrong with renting until the dust settles and you actually know how you stand (emotionally, professionally and financially).

those starry eyed couples that believe sharing a bedroom with an eye on the future is enough of a committment to enter into one of the largest purchases they will make. There is something to be said for actually putting the horse in front of the cart and becoming legally married before entering into the joint possession of a home and joint responsibility of a mortgage.

those relocating to a new area. Moving in of itself is stressful. You can not research enough over a 30-60-90 period to have a complete grasp on a new area. It is much wiser to rent, learn the area and then purchase a home that is located where you will be comfortable

John, We have to help people make the best decisions based on what we know. Some days my job is more counselor than loan officer. I have even been know to suggest professional counseling or marriage programs to folks when I feel that I have the rapport to do that.

Sometimes an outsiders perspective helps folks to take a step back and move forward when ready.

Dear Bridget, boy am I glad that your blog turned out to be different than what I thought in the first split second!

I think this is pretty great information .. people separate/divorce for whatever reason. We don't know the history .. we don't know if they've been living apart for years etc. and it's not really any of our business. So, for whomever finds himself/herself in this situation, you've provided some valuable info and points to ponder.

Andrea, thanks for your concern :)! I have had several clients recently dealing with this issue in all stages of the separation/divorce. Many folks say "But the judge says the house isn't mine, why is it still on my credit?" Sadly I had a woman filling out an application concerned about how the house she and her husband might purchase would be split in a divorce....I put the brakes on, asked her to take a step back, that had disaster written all over it! Hopefully this will help someone going through it!